Faith-Based Charity and Crowd Out during the Great Depression

Interest in religious organizations as providers of social services has increased dramatically in recent years. Churches in the U.S. were a crucial provider of social services through the early part of the twentieth century, but their role shrank dramatically with the expansion in government spending under the New Deal. In this paper, we investigate the extent to which the New Deal crowded out church charitable spending in the 1930s. We do so using a new nationwide data set of charitable spending for six large Christian denominations, matched to data on local New Deal spending. We instrument for New Deal spending using measures of the political strength of a state's congressional delegation, and confirm our findings using a different instrument based on institutional constraints on state relief spending. With both instruments we find that higher government spending leads to lower church charitable activity. Crowd-out was small as a share of total New Deal spending (3%), but large as a share of church spending: our estimates suggest that church spending fell by 30% in response to the New Deal, and that government relief spending can explain virtually all of the decline in charitable church activity observed between 1933 and 1939.

The Phantom of the Opera: Cultural Amenities, Human Capital, and Regional Economic Growth

We analyze the extent to which endogenous cultural amenities affect the spatial equilibrium share of high-human-capital employees. To overcome endogeneity, we draw on a quasi-natural experiment in German history and exploit the exogenous spatial distribution of baroque opera houses built as a part of rulers' competition for prestigious cultural amenities. Robustness tests confirm our strategy and strengthen the finding that proximity to a baroque opera house significantly affects the spatial equilibrium share of high-human-capital employees. Then, a cross-region growth regression shows that these employees induce local knowledge spillovers and shift a location to a higher growth path.cultural amenities, regional economic growth, human capital, Bohemians

The Phantom of the Opera: Cultural Amenities, Human Capital, and Regional Economic Growth

We analyze the extent to which endogenous cultural amenities affect the spatial equilibriumshare of high-human-capital employees. To overcome endogeneity, we draw on a quasinaturalexperiment in German history and exploit the exogenous spatial distribution ofbaroque opera houses built as a part of rulers’ competition for prestigious cultural amenities.Robustness tests confirm our strategy and strengthen the finding that proximity to a baroqueopera house significantly affects the spatial equilibrium share of high-human-capitalemployees. Then, a cross-region growth regression shows that these employees induce localknowledge spillovers and shift a location to a higher growth path.Cultural Amenities, Regional Economic Growth, Human Capital, Bohemians

Government equity and money: John Law’s system in 1720 France

John Law’s System was a radical restructuring of French public finances, carried out from 1716 to 1720. It involved on the one hand a conversion of the existing French public debt into something like government equity, on the other hand the replacement of commodity money with fiat money. For strategic reasons, Law supported the equity at too high a level, resulting in uncontrolled money creation. The System ended with the recreation of a public debt at, surprisingly, the same level as before.France ; Debts, Public ; Money

Summer workshop on money, banking, payments and finance: an overview

The 2010 Summer Workshop on Money, Banking, Payments and Finance met at the Federal Reserve Bank of Chicago this summer, for the second year. The following document summarizes and ties together the papers presented.Payment systems

Government Partnerships With Faith-based Service Providers: The State of the Law

Rapid change and significant uncertainty are the most noteworthy features of the legal environment for participation by faith-based organizations ("FBOs") in government-financed socialservices. Developments in federal constitutional law, statutorily based federal programs, and the administrative environment have altered the legal circumstances in which such opportunities mayappear. In addition, the body of law (federal, state, and local) concerning the employment relation, an emerging focus on state constitutional law, and the existing pattern of contractual relations between government entities and FBOs, contribute to an atmosphere of legal complexity surrounding this field. These patterns of change and uncertainty play a crucial role in the decisions of FBOs on the value and risks involved in participating in such programs, as well as in decisions by government agencies concerning whether and how to undertake such programs.The topics included are 1) the Establishment Clause of the First Amendment to the U.S. constitution, including recent cases involving the application of that Clause to FBOs in service partnerships with government; 2) state constitutional law as a source of impediments to state relationships with FBOs, and federal constitutional challenges to such impediments; 3) the law of employment discrimination – federal, state, and local – as it applies to FBOs in such partnerships; 4) federal programs that explicitly invite participation by FBOs; and 5) state social service contracts with FBOs, and the presence or absence of religionspecific provisions in such contracts

Being religious - A Question of Incentives?

Studies of the relationship between religion and economics can be divided into three major lines of research: behavioural economics of religion (microeconomic approach), macroeconomic consequences of religion and religious explanations of economic phenomena. Except for the third line strong evidence has been found on the microeconomic level of individuals and households that economic behaviour and outcome correlate with religion. Furthermore the role of religion on the macroeconomic level, e.g. the impact on economic growth, has been analyzed, too. However, only a few models integrating these two levels exist. In order to exemplify such an integrated model, the first step of the analysis has to be the examination of the decisions taken on the microeconomic level. For this purpose this paper focuses on rational incentives to be religious and to take part in religious activities without taking into account the benefits derived from religious believes itself.religion, incentives, individual religiosity

Introduction to the macroeconomic dynamics: special issues on money, credit, and liquidity

We motivate and provide an overview to New Monetarist Economics. We then briefly describe the individual contributions to the Macroeconomics Dynamics special issues on money, credit and liquidity.Macroeconomics - Econometric models